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We study the incidence of nonlinear labor income taxes in an economy with a continuum of endogenous wages. We derive in closed form the eects of reforming nonlinearly an arbitrary tax system, by showing that this problem can be formalized as an integral equation. Our tax incidence formulas are valid both when the underlying assignment of skills to tasks is xed or endogenous. We show qualitatively and quantitatively that contrary to conventional wisdom, if the tax system is initially suboptimaldoi:10.3386/w22646 fatcat:5hbphgldj5g2fnpm6hwdzbphlu